Companies are built off profitability. The investments you make are designed to support the products or services you sell. But let’s be honest for a moment, you like buying the things that are core to your business because that’s what you care about. The secondary expenses that occur, those are less fun. Whether you’re dealing in electronics, retail, mortgages, or hamburgers, inevitably there are expenses that arise that don’t support your product. So how do you cut down on those expenses? And how can all the data gathered from shipping and receiving actually improve your profit margins?
“What’s not core to you is core to us. What I mean by core to your businesses is at Harley Davidson, they make motorcycles. They source and buy steel, bolts, oil, leather, so on and so forth. But what they also need to operate their business is they need marketing. They need packaging, they need stores to sell their motorcycles in. Their retail operation. They need to ship things. It’s everything else.”
Craig Garno is the CTO at LogicSource and he’s helping companies such as LuluLemon, BIG Lots, and Tupperware cut down and streamline their spending. On this episode of IT Visionaries, Craig explains why companies that fail to focus on indirect services will struggle to scale the business while also paying more than fair market value. Plus he dives into how LogicSource is helping these businesses trim the fat on those investments, and the role data management plays in its efforts.Enjoy this episode.
Main Takeaways
- Lost in Time: One of the main challenges to solving indirect procurement problems is the lack of attention these services are afforded. In most cases, the data input is still done manually, which also means most of the technology is behind as well. Businesses need to invest in these services in order to not only understand the areas within the supply chain where they are experiencing disruptions, but also to have a better idea of the costs they are incurring on items such as packaging and delivery services.
- Understanding How to Use Data: Once companies begin investing in their internal structures, they need to follow that action by doing a deep dive into understanding what data points are most important to the overall success of the business. But you also need to have a better understanding across the business of how to read and understand what the data is telling you. Once this is accomplished, you will have a better idea of how to fix some of the challenges the company is facing when it comes to procurement spend.
- Keep it Simple: The key to good product design is to not overcomplicate the application. When apps are easy to read, agile, easy to scale, and simple to understand, you have a greater chance of the product gaining traction and more adoption.
For a more in-depth look at this episode, check out the article below.
Article
Companies are built off profitability. The investments you make are designed to support the products or services you sell. But let’s be honest for a moment, you like buying the things that are core to your business because that’s what you care about. The secondary expenses that occur arem less fun. Whether you’re dealing in electronics, retail, mortgages, or hamburgers, inevitably there are expenses that arise that don’t support your product. So how do you cut down on those expenses? And how can all the data gathered from shipping and receiving actually improve your profit margins?
“What’s not core to you is core to us. What I mean by core to your businesses is at Harley Davidson, they make motorcycles. They source and buy steel, bolts, oil, leather, so on and so forth. But what they also need to operate their business is they need marketing. They need packaging, they need stores to sell their motorcycles in. Their retail operation. They need to ship things. It’s everything else.”
Craig Garno is the CTO at LogicSource and he’s helping companies such as LuluLemon, BIG Lots, and Tupperware cut down and streamline their spending. On this episode of IT Visionaries, Craig explains why companies that fail to focus on indirect services will struggle to scale the business while also paying more than fair market value. Plus he dives into how LogicSource is helping these businesses trim the fat on those investments, and the role data management plays in its efforts.Enjoy this episode.
LogicSource deals in the area of indirect procurement services, which can be anything from the logistics of the supply chain, to marketing services, to packaging of an item. Garno mentioned businesses have a tendency to only invest in those core elements of the business, which means the technology, or the data needed to operate indirect services effectively is often left behind.
“What we find in our clients, there’s a lack of data because a lot of indirect work is done manually,” Garno said. “Where there’s technology, it perhaps wasn’t implemented completely, or it was shelved. What you get out of that is you get supplier fragmentation, you get road buying, you get non-compliance of price.Those disciplines that may be on the direct side just aren’t there on the indirect side.”
Because gathering enough data is key, Garno said his team spends most of their time just learning the ins and outs of each company. What they need, what services they buy, and then they streamline that process by developing tools and services around that company’s needs. But when you’re dealing with any company’s data, especially sensitive data, the process is a difficult one.
“Anytime you start with a new client relationship, where they’re going to be sharing data, the first thing you’re going to do is meet with their security team,” Garno said. “You’d meet with a group of people to make sure you’re putting the controls in place, proving to your clients that you can take care of their data and then backing it up with audits through third party pen tests, vulnerability assessments on our applications. It’s all about making sure that you’re taking care of your clients, their data and keeping everything whole.”
For Garno, who is LogicSource’s first CTO, the role requires him to work on functions that are not core to other businesses, but the software the company uses actually includes many elements that he architected and designed in the past with other companies.
“I’ve always been a product development guy,” he said. “I love building software. I love building applications — it’s what excites me to this day. As a services organization, we bought and merged into the organization at inception procurement technology that myself and a team of people that architected in a prior life. So we merged that business into this business.”
To hear more from Garno and the work LogicSource is doing in the indirect procurement space, check out the full episode of IT Visionaries!
To hear the entire discussion, tune into IT Visionaries here.
